Some Critical Remarks on Alain Parguez’s “Economic Theories of Social Order and the Origins of the Euro”

Abstract

This article focuses on the developments following World War II that led to the creation of the single currency. It will point out how the initial diverging political and economic positions of France and Germany gradually moved toward a degree of convergence. After the death of President Pompidou, France discarded the approach stressing national sovereignty in monetary affairs that had been a feature of Gaullist foreign policy. After the fall of the Berlin Wall, Germany found that the single currency was not just the natural adjunct of the single market, which, at the time, had been the main argument used to sponsor it: the single currency appeared as a way of anchoring Germany’s future to Europe and thus was instrumental in getting Germany’s European partners, beginning with France, to endorse German reunification. The article examines how monetary union became divorced from the economic union that was supposed to accompany it. It looks at the way the monetary union has led to the adoption of deflationary policies in a number of European countries, and how this could be its death knell.

Keywords:

• Economic and Monetary Union
• European Monetary System
• German reunification
• optimal currency area
• ordo-liberalism
• Stability and Growth Pact

Additional information

Notes on contributors

Bertrand de Largentaye

Bertrand de Largentaye is a retired official of the French Ministry of Agriculture, the French Ministry of Foreign Trade, the European Commission, and the European External Action Service. He is grateful for the very helpful comments provided by Armand de Largentaye, Hélène de Largentaye, and Xavier Ousset.